Citizens Property Insurance Audit Committee Meeting: February 2012
Feb 8, 2012
The Citizens Property Insurance Corporation (“Citizens”) Audit Committee (“Committee”) met on February 1, 2012, during which it approved the Audit Committee Charter and the 2011 Annual Audit Report.
After approving minutes from the December 13, 2011 meeting, the Committee heard a presentation by Citizens Chief of Internal Audit Joyce Bellows, who explained that two foundational documents – the Audit Committee Charter and the Office of Internal Audit Department Charter – need to be approved annually by law.
The Audit Committee Charter is a formal written document that defines the authority and responsibility of the Committee as delegated by Citizens’ Board of Governors. The Office of Internal Audit (“OIA”) Department Charter defines the OIA’s purpose, authority and responsibility per statutory requirements and in accordance with Citizens’ Internal Audit Standards.
The Annual Report is required to be issued on or before February 15 to the Florida Financial Services Commission, Florida Senate President, Speaker of the House and Citizens Board of Governors.
The Committee unanimously approved both documents and the 2011 Annual Report.
Ms. Bellows explained that the OIA has completed three previous audits and submitted reports for each since the last Committee meeting, and is currently assessing and developing the OIA’s core strategy.
A senior auditing position has recently been filled with a candidate who has worked as an internal auditor for eight years, she stated. She further noted that the main goal for the OIA is to execute the 2012 Audit Plan.
“It is intended to be dynamic in nature and continually evaluated. As things change there may be a time where the audit plan may need to have adjustments,” Ms. Bellows said. “That is usually done on a six-month basis.”
Work is continuing on a quarterly newsletter, and an RFP has been submitted for security internal audit service vendors, she said. The responses are currently being evaluated.
She noted that the 2011 Annual Report shows that 13,316 total audit hours were expended last year.
During the month of 2011 and the first month of 2012, the OIA issued six audit reports. Areas of high concern are related to physical security including the security of confidential data are currently being addressed by management, she added.
A detailed management report has been compiled and action plans needed to address any areas of concern will be identified by mid-February.
At the conclusion of her report, Ms. Bellows announced she will be leaving Citizens to pursue other endeavors and thanked those in attendance for the support she received during her employment. She joined the OIA in November 2007.
Next, Citizens’ Director of Enterprise Risk Management (“ERM”) Chris Howell gave a brief update on ERM, explaining that risk is a “way of thinking, a perception” that involves likelihood, probability and impact.
“We are trying to educate and inform and start the discussion about risk,” Mr. Howell said. He said Citizens aim is to focus on improving their “risk culture” and connecting risk with the achievement of their corporate goals.
ERM is one of nine corporate initiatives for 2012, Mr. Howell added.
Highlights from Citizens’ General Counsel Dan Sumner’s report follow:
- 21 new complaints, 7 cases closed, 4 cases unsubstantiated and 3 cases merged in the Fourth Quarter of 2011
- 43 percent of all complaints in the Fourth Quarter were anonymous
Mr. Sumner explained that Citizens needs to make sure it has a solid compliance program in place. He said the Legal Department has been working with various business units within Citizens to compile an inventory of the laws the various units of Citizens are subject to. He said outside counsel was hired to make sure the inventory list is complete, but noted that the process of updating the list is ongoing.
Citizens’ first Ethics and Compliance Officer was hired in December 2010, but has since left her position. As a result, Citizens is recruiting someone to fill it.
With no further business before the Committee, the meeting was adjourned.
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